Labor Force Statistics from the Current Population Survey

Employee Tenure News Release

Technical information:(202) 691-6378 USDL 08-1344
http://www.bls.gov/cps/
For release: 10:00 A.M. (EDT)
Media contact: (202) 691-5902 Friday, September 26, 2008
EMPLOYEE TENURE IN 2008
The median number of years that wage and salary workers had been
with their current employer was 4.1 years in January 2008, little
changed from 4.0 years in January 2006, the Bureau of Labor Statistics
of the U.S. Department of Labor reported today.
Information on employee tenure has been obtained from supplemental
questions to the Current Population Survey (CPS) every 2 years since
1996. The CPS is a monthly survey of about 60,000 households that
provides information on the labor force status, demographics, and
other characteristics of the civilian noninstitutional population age
16 and over. The questions about employee tenure measure how long
workers had been with their current employer at the time of the sur-
vey. A number of factors can affect the median tenure of workers,
including changes in the age profile among workers as well as changes
in the number of hires and separations. (See the Technical Note.)
Demographic Characteristics
In January 2008, median tenure (the point at which half of all
workers had more tenure and half had less tenure) for men was 4.2
years, about unchanged from January 2006. For women, median tenure
in January 2008 was 3.9 years, unchanged from January 2006. (See
table 1.)
Older workers tend to have more years of tenure than their younger
counterparts. For example, median tenure for employees age 55 to 64
was 9.9 years in January 2008, almost four times the tenure (2.7 years)
for workers age 25 to 34. (See table 1.)
The percentage of all wage and salary workers age 16 and over with
10 or more years of tenure with their current employer was 27 percent
in January 2008. Among men, 28 percent had at least 10 years of ten-
ure with their current employer in January 2008, higher than the 26
percent among women. A larger percentage of older workers than younger
workers had 10 or more years of tenure. More than half of all workers
age 55 and over were employed for at least 10 years with their current
employer in January 2008, compared with only 10 percent of those age 30
to 34. (See tables 2 and 3.)
The proportion of Hispanic wage and salary workers (age 16 and
over) with 10 or more years of tenure with their current employer was
19 percent in January 2008, compared with 28 percent of white, 24 per-
cent of black, and 21 percent of Asian workers. (See table 3.) The
shorter tenure among Hispanics can be explained, in part, by their re-
lative youth. Nearly 50 percent of Hispanic workers age 16 and over
were between the ages of 16 to 34. In contrast, less than 40 percent
of whites, blacks, and Asians were between 16 and 34 years old.
- 2 -
In January 2008, about 23 percent of all wage and salary workers
age 16 and over had 12 months or less of tenure with their current
employer. These short-tenured workers include new entrants and
reentrants to the labor force, job losers who found new jobs during
the previous year, and workers who had voluntarily changed employers
during the previous year. Younger workers are more likely than older
workers to be short-tenured employees. For example, among 20- to 24-
year-old workers, about half had a year or less of tenure with their
current employer. Among wage and salary workers age 55 to 64 and
those age 65 and over, less than 10 percent had a year or less of ten-
ure. (See table 3.)
Industry
In January 2008, wage and salary workers in the public sector had
double the median tenure of private sector employees, 7.2 versus 3.6
years. The longer tenure among workers in the public sector is ex-
plained, in part, by a higher share of workers age 35 and over among
government workers than in the private sector. About 3 in 4 govern-
ment workers were age 35 and over, compared with about 3 out of 5 pri-
vate wage and salary workers. Federal employees had a higher median
tenure (9.9 years) than state (6.5 years) or local government (7.1
years) employees. (See table 5.)
Within the private sector, workers in manufacturing had the highest
median tenure among the major industries (5.9 years). In contrast,
workers in leisure and hospitality had the lowest median tenure (2.1
years). These differences in tenure reflect many factors, one of
which is varying age distributions across industries; workers in manu-
facturing tend to be older on average than workers in leisure and hos-
pitality. (See table 5.)
Occupation
Among the major occupations, workers in management, professional,
and related occupations had the highest median tenure (5.1 years) in
January 2008. Within this group, employees with jobs in architecture
and engineering occupations (6.4 years) and management occupations
(6.0 years) had the longest tenure. Workers in service occupations,
who are generally younger than persons employed in management, profes-
sional, and related occupations, had the lowest median tenure (2.8
years). Among employees working in service jobs, food service workers
had the shortest median tenure, at 2.0 years. (See table 6.)
-----------------------------------------------------------
| |
| Imputed Data for Older Veterans and Young Workers |
| |
| Due to a programming error in the January 2008 survey |
| instrument, employee tenure information was not obtained |
| from respondents who were 16 years old and from those who |
| were veterans age 65 and over. Missing data for these |
| individuals were imputed using information collected from |
| respondents who were 16 years old and veterans age 65 and |
| over in the January 2006 supplement. This imputation had |
| minimal effect on the overall estimates because of the |
| similar employment characteristics of these two groups in |
| January 2006 and January 2008. |
| |
-----------------------------------------------------------

- 3 -
Technical Note
The data in this release were collected through a supplement to the
January 2008 Current Population Survey (CPS). The CPS, which is
conducted by the U.S. Census Bureau for the Bureau of Labor Statistics
(BLS), is a monthly survey of about 60,000 households that provides
information on the labor force status, demographics, and other charac-
teristics of the nation's civilian noninstitutional population age 16
and over.
The January 2008 CPS supplement obtained information on worker dis-
placement and workers' tenure with their current employer. The data on
worker displacement appear in the BLS news release USDL 08-1183, "Worker
Displacement, 2005-2007," issued on August 20, 2008.
Information in this release will be made available to sensory-impaired
individuals upon request. Voice phone: (202) 691-5200, TDD message re-
ferral phone number: 1-800-877-8339.
Reliability of the estimates
Statistics based on the CPS are subject to both sampling and nonsampling
error. When a sample, rather than the entire population, is surveyed,
there is a chance that the sample estimates may differ from the "true" pop-
ulation values they represent. The exact difference, or sampling error,
varies depending on the particular sample selected, and this variability
is measured by the standard error of the estimate. There is about a 90-
percent chance, or level of confidence, that an estimate based on a sam-
ple will differ by no more than 1.6 standard errors from the "true" popu-
lation value because of sampling error. BLS analyses are generally con-
ducted at the 90-percent level of confidence. The CPS data also are af-
fected by nonsampling error. Nonsampling error can occur for many rea-
sons, including the failure to sample a segment of the population, in-
ability to obtain information for all respondents in the sample, inabil-
ity or unwillingness of respondents to provide correct information, and
errors made in the collection or processing of the data.
For a full discussion of the reliability of data from the CPS and in-
formation on estimating standard errors, see the explanatory note for
the household survey online at http://www.bls.gov/cps/eetech_methods.pdf.
Tenure questions and concepts
In the January 2008 CPS supplement, questions on tenure were asked of
all employed persons. The first question was: "How long has ... been
working continuously for (fill in name of present employer)?"
_____ Days
_____ Weeks
_____ Months
_____ Years
For responses of "1 year" or "2 years," a follow-up question was asked:
"Could you please give the exact number of months?"
- 4 -
The purpose of the follow-up question is to obtain more precise informa-
tion on workers who had been with their current employer for a relatively
short time. This follow-up question was included for the first time in
the February 1996 CPS supplement on worker displacement and tenure. CPS
supplements that obtained information on tenure in January of 1983, 1987,
and 1991 did not include the follow-up question. In those surveys, re-
sponses of 1 year or more could be coded only as the nearest full year,
and responses of less than a year were coded as the nearest full month.
Prior to January 1983, CPS supplements on tenure asked wage and salary
workers, "When did ... start working at (his/her) present job?" For
wage and salary workers, the meaning of the term "job" is ambiguous. For
example, a worker who had been employed at a particular company for 10
years and had been promoted to a managerial position 1 year prior to the
survey may have been counted as having 10 years or 1 year of tenure, de-
pending on whether the respondent interpreted the question to mean tenure
with the current employer or tenure in the managerial position. To rec-
tify this ambiguity, the wording of the question was changed in January
1983 to specify the length of time a worker had been with his or her cur-
rent employer. The change resulted in a break in historical comparability.
Data refer to the sole or principal job of full- and part-time workers.
All data exclude the incorporated and unincorporated self employed.
Interpreting tenure data
Data on tenure have been used as a gauge of employment security, with some
observers regarding increases in tenure as a sign of improving security and
decreasing tenure as a sign of deteriorating security. However, there are
limitations to using the data in this way. For example, during recessions
or other periods of declining job security, median tenure and the proportion
of workers with long tenure could rise because less-senior workers are more
likely to lose their jobs than are workers with longer tenure. During periods
of economic growth, median tenure and the proportion of workers with long
tenure could fall because more job opportunities are available for new en-
trants to the workforce and experienced workers have more opportunities to
change employers and take better jobs. Tenure also could rise under im-
proving economic conditions, however, as fewer layoffs occur and good job
matches develop between workers and employers.
A changing age distribution among workers would also affect median tenure.
Since older workers are more likely to have long tenure with their current
employer than younger workers, aging baby boomers in the workforce would
provide upward pressure on overall median tenure.